Review of the Papers, Monday 09 June

**Government  **

• The Treasury is planning to disband the government's controversial arms sales department, the Guardian can disclose. The 450-strong defence export services organisation (Deso), based near Oxford Street in London, has long been the target of anti-corruption campaigners and opponents of the arms trade. The former Treasury cabinet minister Stephen Timms launched proposals earlier this year to close down the secretive unit on the grounds that it subsidises profitable weapons giants such as BAE, Britain's biggest arms firm. According to Westminster sources, the Treasury's industrial productivity section argued that the taxpayer should not continue to subsidise an "anachronistic" department which had gained too much influence within Whitehall. http://www.guardian.co.uk/armstrade/story/0,,2121881,00.html
• Decline and deprivation still afflicts some of England's once-great northern cities despite the much-vaunted urban renaissance of the past decade, a think-tank close to the Government will warn today. Northern cities dominate the list of the worst performers and are lagging behind the most successful boom towns of the South, according to research by the left-leaning Institute for Public Policy Research (IPPR). Liverpool was rated the lowest performing city in England, followed by Middlesbrough, Birmingham, Sunderland and Newcastle, according to economists who carried out the research. The report follows angry complaints by civil leaders in Hull that the city had been ignored by the media despite suffering from severe damage in the recent floods. Today's report shows that Hull has one of the highest rates of benefits claimants and people with no qualifications in England, more than twice the rates in Reading, Southampton and Bristol. http://news.independent.co.uk/uk/this-britain/article2747749.ece
• A drive to cut Olympic construction costs is threatening to suck in large numbers of "bogus self-employed" migrant workers, leading to widespread tax avoidance and blocked work opportunities for local people, ministers have been warned. Alan Ritchie, general secretary of UCATT, the construction union, has written to Jane Kennedy, financial secretary to the treasury, and Paul Gray, chairman of Revenue & Customs, warning that a decision by the Olympic Delivery Authority to allow contractors to recruit self-employed workers would encourage tax abuses and reduce site safety. More than 10,000 construction workers are likely to be engaged in Olympic projects at the height of development, according to the union, which wants the authority to ban the use of self-employed workers. http://www.ft.com/cms/s/a6a1fb3c-2d65-11dc-939b-0000779fd2ac.html
• Health inspectors intervened last night to protect patients at an NHS hospital after they discovered it was in flagrant breach of hygiene regulations. The Healthcare Commission served an improvement notice on Chase Farm hospital in Enfield, north London, after a spot check found staff were breaking the rules for combating the superbugs MRSA and Clostridium difficile. It was the first use of a new legal power to enforce the hygiene code introduced in October to stop the spread of healthcare-linked infections. http://www.guardian.co.uk/uk-news/story/0,,2121693,00.html

Conservatives

• The Conservatives will bolster their plans for tax breaks for married people with proposals for an overhaul of the benefits system to encourage couples to stay together, party leader David Cameron signalled yesterday. Despite alarm among some Tory MPs that the party is prepared to risk stigmatising unmarried couples and single-parent families, Mr Cameron said he continued to believe that the main cause of social breakdown - which he described as "the big question of our times" - was family separation. "If you look at unmarried couples half of them split up by their child's fifth birthday. The figure for married couples is one in 12. So the evidence is incredibly strong ... we should recognise marriage in the tax system," Mr Cameron said in an interview on Sunday AM on BBC1. http://www.guardian.co.uk/uk-news/story/0,,2121724,00.html
• The drinks industry has hit out at a Tory policy group proposal for a significant tax increase on alcohol, arguing that it would damage British companies without achieving its aim of tackling binge drinking. A report from the Tories' social justice policy group will on Monday recommend a sharp increase in alcohol prices to reduce consumption. It will highlight the case for a "treatment tax", equivalent to at least 7p on the cost of a pint of beer, to double the £400m a year spent by the state on recovery programmes. Iain Duncan Smith, the Conservatives' former leader and head of the group, said that radical measures were needed to tackle what is "almost an alcohol epidemic in Britain, particularly amongst youngsters". He highlighted the "hidden costs" of rising alcohol consumption to the state. http://www.ft.com/cms/s/b4910c4c-2d88-11dc-939b-0000779fd2ac.html